In 1836, he was ordered to Australia, arriving at Hobart on 5 August 1836 and at Sydney 18 days later. On 18 September 1836, HMS Rattlesnake left for Port Phillip District (later Melbourne) conveying Captain Lonsdale and other officials to the new colony. During the next three months, Hobson and his officers thoroughly surveyed Port Phillip, the northern portion of which, by direction of Governor Sir Richard Bourke, was named Hobson's Bay, after him. His ship was involved in the founding of Williamstown. He was offered the position of Superintendent of the Bombay Marine at a salary of £2000 a year, but he had taken a liking to Australia and was a candidate for the governorship of Port Phillip, although the salary was not expected to be more than £800 a year.

On 26 May 1837 Hobson sailed to the Bay of Islands, New Zealand, in response to a request for help from James Busby, the British Resident, who felt threatened by wars between Māori tribes. For three months in 1837 Pomare II (Whiria) fought with Titore until a peace agreement was negotiated by Tareha.[2] On his return to England in 1838, Hobson submitted a report on New Zealand, in which he proposed establishing British sovereignty over the islands in small pockets similar to the Hudson's Bay Company in Canada.[3]

Hobson arrived in the Bay of Islands on 29 January 1840 (which northern New Zealanders mark as Auckland Anniversary Day) with a small group of officials, including an Executive Council consisting of Colonial Secretary Willoughby Shortland, Colonial Treasurer George Cooper and Attorney-General Francis Fisher. The Legislative Council comprised the above officials and three Justices of the Peace. Hobson appointed as three Magistrates, Messrs. Shortland, Johnson, and Matthew.[4]

Upon arrival, Hobson almost immediately drafted the Treaty of Waitangi together with his secretary James Freeman and Busby. After obtaining signatures to the Treaty at the Bay of Islands (6 February 1840), he travelled to Waitemata Harbour to obtain more signatures and to survey a suitable location for a new capital (he also sent the Deputy Surveyor-General, William Cornwallis Symonds, to other areas to obtain more signatures). After suffering a stroke on 1 March 1840, he was taken back to the Bay of Islands, where he recovered sufficiently to continue work.[5]

On 21 May 1840, in response to the creation of a "republic" by the New Zealand Company settlers of Port Nicholson (later Wellington), who were laying out a new town under the flag of an independent New Zealand, Hobson asserted British sovereignty over the whole of New Zealand, despite the incompleteness of the treaty signing. He sent Willoughby Shortland and some soldiers to Port Nicholson on 25 May 1840, and the council of the settlers was disbanded. Their leader, William Wakefield, later travelled to the Bay of Islands to pledge allegiance to the Crown. His suggestion to make Port Nicholson the capital was rejected in favour of Hobson's plan for a new town on Waitemata Harbour, to be named Auckland after the Earl of Auckland.

Hobson travelled to Wellington in August 1841, where he heard the complaints of settlers and selected magistrates. He then visited Akaroa to settle the French claims. Back in Auckland, he had some difficulty with the Māori, and his government was ridiculed by journalists in Wellington and Auckland. He responded by closing down the New Zealand Herald and Auckland Gazette. With his government low on funds, he resorted to issuing unauthorised bills on the British Treasury in 1842. Hobson faced opposition from the "Senate clique" radicals who sent a petition to the Foreign Secretary to have Hobson recalled. One of Hobson's last actions was to declare an Auckland Anniversary Day, to mark the anniversary of his arrival in the Bay of Islands.

William Hobson's grave at the Symonds Street cemetery, central Auckland.